Hem v. Toyota Motor Corp.

In March 2007, Plaintiff Dara Hem brought suit in a Texas federal court after he was seriously injured in an accident. Hem was traveling through northern New Mexico when his Toyota truck separated from the U-Haul trailer it was towing, causing the truck to roll over several times. After treating Hem for his injuries, the University of New Mexico Hospital (UNMH) recorded a hospital lien for Hem's outstanding medical bills. The lien would attach to any future judgment or settlement he might procure from a lawsuit, pursuant to the Hospital Lien Act. Although Hem did not dispute the amount owed, UNMH agreed to compromise on the lien amount and accept a lesser amount as payment in full. In exchange, one of Hem's attorneys, Miller, agreed to give up his statutory priority over settlement funds already obtained from U-Haul and some anticipated settlement funds from Toyota, so UNMH would be paid first. The issue this case presented for the Supreme Court's review was whether the agreement UNMH made to reduce the amount of a lien for medical services rendered violated Article IV, Section 32 of the New Mexico Constitution. UNMH argued it had priority over settlement funds pursuant to the agreement between itself and Hem's initial attorney, Clay Miller. Hem's second attorney, Turner & Associates, P.A. (claimant in interpleader) argued that this agreement was unconstitutional. Therefore, Turner argued that it has a priority right to collect fees and costs out of the interpleaded settlement funds prior to the satisfaction of the hospital lien, pursuant to the Act. The New Mexico Supreme Court held that: (1) the first clause of Section 32 was correctly interpreted in State Investment and is strictly a limitation on the Legislature; and (2) Article IV, Section 32 of the New Mexico Constitution does not prohibit UNMH from agreeing to compromise the amount owed by a patient-debtor. View "Hem v. Toyota Motor Corp." on Justia Law